Many American consumers have run into economic problems during the last few years as a result of the nationwide recession, which may have led them to lean too heavily on their credit cards to make ends meet. For some families, this has brought financial challenges, as their credit card bills have piled up and become unmanageable. Fortunately for them, there are a number of options that can help eliminate credit card debt, and get one back on the path to debt freedom.
Consumers who have maintained a high credit score may benefit from a credit card debt consolidation loan to help them eliminate credit card debt. Credit card consolidation is a viable solution for many, and it is a simple process that can serve to reduce the hassles of dealing with several credit card companies at once. In addition, the strategy often lowers monthly payments, and in doing so, reduces the total payback of principal and interesting over the life of the loan.
Consumers that are carrying several unsecured debt obligations with high interest rates can apply for a debt consolidation loan, in which a bank issues a new loan for enough money to pay off all their outstanding debt balances at once. For consumers that are approved, they can consolidate their debt into one single monthly payment at a lower interest rate. If consumers choose to pay more towards their principal balance every month than the minimum payment, they can get out of debt more quickly.
Another option for consumers to eliminate credit card debt is to seek a debt settlement or debt negotiation company that will work with their creditors to structure settlements at a reduced balance. While creditors may not normally consider settling if a consumer inquired directly, debt negotiation firms have relationships with the lenders to help structure these reduced settlements. Lenders would rather receive a partial payback of the balance they are due, rather than risk receiving no payment at all.
Debt negotiation companies can typically eliminate credit card debt by somewhere between 40 and 60 percent of what is owed at the time of settlement. The challenge to this method is that it requires a consumer to have accumulated sufficient savings to make the settlements, which many consumers might not have readily available. Hence, it is very important that individuals find a good debt settlement company that helps them save money from the outset of the program, and thereby represents their best interests.
Consumers in search of the right strategy to eliminate credit card debt should research their options thoroughly and select a debt management solution that best fits their lifestyle and financial needs.